The European Bank for Reconstruction and Development (EBRD) is set to boost the resilience of Egypt’s financial sector through a $50m investment to the Lorax Capital Partners (LCP) Fund II.
The financing will go towards supporting equity financing provided for small- and medium-sized enterprises (SMEs) in Egypt.
Equity fundraising is currently experiencing challenging times in the southern and eastern Mediterranean (SEMED) region due to the novel coronavirus (COVID-19) pandemic and SMEs are facing a decrease in their activity and liquidity shortages. The EBRD’s commitment to LCP Fund II helps to bring a SEMED fund to fruition during the crisis.
Anne Fossemalle, EBRD Director and Head of the Equity Funds team, said, “We are thrilled to support a local and independent team such as Lorax.
She added, “The EBRD’s investment in LCP Fund II helps to contribute to the development of private equity in Egypt, and will help to provide long-term capital growth to SMEs in the region.”
This investment marks the EBRD’s second in an Egypt-focused private equity fund, following its foray in the sector through Ezdehar Egypt Mid-Cap Fund in 2016.
Lorax Capital Partners is an experienced and independent team based in Cairo. With the support of the EBRD, the fund held a first closing of $142m in September 2020, launching its first traditional private equity fund. The Fund is targeting total commitments of $250m.
Egypt is a founding member of the EBRD. Since the start of its operations in the country in 2012, the EBRD has invested over €6.8bn in 123 projects in Egypt.